Square Turns On Bitcoin Payments by Default for Eligible US Merchants

Square has switched Bitcoin payments on by default for eligible US merchants across its network of more than four million sellers, moving crypto acceptance from an opt-in feature to a standard setting in everyday retail commerce. The payments run over the Lightning Network, Bitcoin's layer-2 for fast, low-cost transactions, and Square says settlement is near-instant.

The default configuration pays merchants in US dollars. When a customer pays in Bitcoin, the protocol converts the funds automatically at the moment of payment, which removes price volatility from the merchant's side of the transaction. Sellers who want to keep the Bitcoin can opt to hold it instead.

The fee schedule is the sharpest incentive. Processing is free through December 31, 2026, and moves to a flat 1% starting January 1, 2027 — below Square's typical blended card rates for many merchant categories. No new hardware is required: the feature plugs into existing tools including Square Register, Invoices and Square's apps.

What Are the Limits?

Square has set explicit guardrails on the service:

• Individual transactions are capped at approximately $600.
• Each seller faces a daily ceiling of about $20,000.
• The service is unavailable in New York and certain other jurisdictions.

The exclusions show where regulation still constrains rollout. New York's licensing regime under the Department of Financial Services has long been a hurdle for crypto payment products, and Square's geographic carve-outs reflect that reality rather than a technical limitation.

Square is also letting businesses convert up to 50% of eligible daily card sales into Bitcoin, extending the feature beyond customer-facing payments into treasury management.

Why Is Block Doing This?

The move reflects Block's effort to embed crypto into everyday commerce, steered by CEO Jack Dorsey and Bitcoin product head Miles Suter. The design tackles the two complaints small businesses most often raise about accepting Bitcoin: volatility and operational hassle. Automatic dollar conversion addresses the first; integration with existing Square tools addresses the second.

The shift from opt-in to on-by-default is the bigger structural change. A feature that merchants must activate reaches enthusiasts. A feature that is live unless a seller turns it off reaches the full base — and that base exceeds four million sellers.

What Does This Mean for the Market?

For merchants, the near-term calculus is simple: accepting Bitcoin costs nothing in processing fees through the end of 2026, requires no new equipment, and pays out in dollars unless the seller opts to hold crypto.

For the Bitcoin network, default acceptance at this scale pushes Lightning-based payments toward mainstream retail rails, with the transaction and daily caps steering usage toward small-ticket purchases rather than high-value transfers. Merchants in excluded jurisdictions — New York above all — will be watching whether licensing arrangements eventually close the gap.

The real inflection point arrives on January 1, 2027, when the free window ends and the flat 1% fee takes effect; merchant adoption past that date will show whether Bitcoin acceptance on Square is durable economics or a subsidized experiment.